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Lucid: On the Road to a $100 Billion Market Cap? This Analyst Says ‘No’

The EV trend is at peak hysteria levels right now. Rivian’s share price has gone through the roof even after its public debut last week made it 2021’s biggest IPO, with the company already valued at just under $130 billion.

However, Lucid Motors (LCID) is giving the new EV star a good run for its money, with shares up by 118% over the past month alone; Lucid’s market cap now stands at just under $90 billion.

Investors have cheered on a steady stream of recent positive developments; the company made its first vehicle deliveries and announced the latest retail location, while the Lucid Air has been awarded the title of MotorTrend car of the year.

Meanwhile, Q3 results showed a stronger cash position than expected and impressive growth for the company’s order book. Lucid saw out the quarter with 13,000 reservations (amounting to around $1.3 billion), which has since swelled to more than 17,000.

So, with all this as backdrop, is it time for LCID bear Morgan Stanley’s Adam Jonas to change his tune? Well, maybe just a little.

Jonas notes that even with the high purchase price in the “increasingly marginalized sedan segment,” the company has already generated an “impressive” number of reservations. And as the company has actually made its first batch of deliveries and the order book is exhibiting pacey growth, the analyst feels it is only right to adjust his estimates.

For FY22, Jonas now forecasts 15,000 units compared to 7,000 previously (Lucid is targeting 20,000). Much further down the line, for FY30, the analyst now anticipates volume of 400,000 units instead of the prior 310,000 units (Lucid expects just under 550,000 units by then). To achieve these numbers, Jonas says the company will need to open at least another factory.

Accordingly, there’s also room for a new price target. The figure rises from $12 to $16, which now indicates the downside only comes in at… wait for it… 70%. Unsurprisingly, there’s no change to Jonas’ rating, which stays an Underweight (i.e. Sell). (To watch Jonas’ track record, click here)

Two other analysts have been following Lucid’s progress and unlike Jonas they are both positive, which results in the stock’s Moderate Buy consensus rating. However, it is increasingly hard to keep up with the soaring share price; as such, the $43 average target now suggests shares will trend south ~18% over the coming months. (See Lucid stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.